Angola: Ramping Up the Fight Against Corruption

For the first time in 133 years, Angola has a new penal code. On January 23, 2019, the National Congress of Angola approved the new code, which will replace the one put in place by the Portuguese just after the Congress of Berlin, where the European powers divided Africa into colonial spheres of influence. The new code is one of the central pillars of President João Lourenço’s criminal justice reform program, and is supported by both the ruling MPLA and the main opposition party, UNITA. The law was approved by the Parliament with only one dissenting vote and will come into force 90 days after its approval publication.

The new penal code is being celebrated by the government as making important progress toward adapting the law to modern Angolan society. The new code proposes a structural change of the Angolan penal system and, particularly regarding the fight against corruption, it promotes more transparency consistent with the global trend to increase anticorruption enforcement, as we previously covered here and here. In this post, we outline the main changes promoted by the new penal code related to corruption and economic crimes and the implications for companies operating in Angola.

New Provisions Related to Corruption and Economic Crimes

Since he took office in September 2017, President Lourenço has taken concrete actions to promote economic stabilization, fight corruption, and attract foreign direct investment. In March 2018, the new administration created a specialized anti-corruption (“SCI”) unit within the executive branch tasked with preventing corruption-related crimes. Since then, there has been a significant increase in the number of investigations related to economic crimes, including cases involving ministers and public managers. According to the former Deputy Attorney General of Angola João Coelho, the most investigated areas are the banking sector and employees from the Tax General Administration (AGT). The SCI and the National Police of Angola have been also been cooperating internationally, including with partners such as Interpol.

Anti-Corruption Provisions of the New Code

Chapter IV of the code criminalizes “whoever offers, promises or gives” to public officials (article 360) or to judges or arbitrators (article 362) an undue benefit, either patrimonial or not; and the crimes of passive corruption, which penalizes the public officials (article 361) or judges and arbitrators (article 363) who “ask for, request, or accept, for himself or for third parties” any undue benefit or promise of benefit. Chapter IV also criminalizes other economic crimes, such as “influence traffic” (article 368) and the embezzlement of public assets (article 364) (“peculato”).

Anti-Money Laundering Provisions of the New Code

In an effort to protect the financial system and strengthen anti-money laundering measures, the code creates new limits on economic conduct and punishes crimes against consumers. One of the most significant changes is that article 470 limits cash transactions to prevent the circulation of large amounts of money outside the formal financial system. The limitation is three million kwanzas (8,522 euros) for citizens and five million kwanzas (14,285 euros) for companies.

Such limits were not covered by the previous penal code, nor by the Anti-Money Laundering and Countering Financing of Terrorism Law (Law 34/11). The new provisions will allow disciplining and punishing some practices that harm the financial market. According to the Deputy Attorney General Mota Liz, these changes also provide “greater security for the national currency” and assures more “fluidity to the national financial system.” These changes may create a more secured environment for investors in Angola, particularly in the banking sector.

Notable Arrests and Investigations

In addition to enacting new legislation, numerous government officials have been terminated or face legal prosecution for alleged corruption. One of the most significant cases involved Filomeno dos Santos, son of the former president. After being terminated from his position as head of Angola’s $5 billion sovereign wealth fund, Mr. dos Santos was arrested in September 2018 by Angolan authorities in connection with a fraud pertaining to a $500 million transaction out of Angola’s sovereign wealth fund and other crimes. On March 24, 2019, Mr. dos Santos was released from prison after the Attorney General’s Office announced that it recovered $2.34 million from banks in the UK and in Mauritius.

Isabel dos Santos, the former president’s daughter, was also fired by Lourenço from her position as the head of Sonangol, Angola’s state oil company, and there are indications that the Attorney General’s office will start an investigation against her. Other high profile individuals are under investigation by the Attorney General’s Office for alleged corruption, such was the former president of the Congress, Higino Carneiro, and the former vice president of Angola Manuel Vicente.

Looking to the Future

The anticorruption and anti-money laundering provisions of the new penal code reinforce the government’s commitment to far-reaching reforms. Although it is still too soon to assess the extent to which these provisions will be enforced, the approval of the new code is undoubtedly a sign that the Angolan government will take a more aggressive approach to combatting corruption and money laundering in the country. If fully implemented, the new code will increase the legitimacy of public institutions and help level the playing field for the private sector.

Juliana Rodrigues is an international associate in Covington’s New York office. Juliana received her bachelor and master degrees in law in her home country of Brazil before receiving her LLM from New York University of Law.